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Kent Reliance revises buy to let lending criteria

Kent Reliance for Intermediaries has revised its buy to let lending criteria and will now make assessments about required minimum rental income and maximum loan amounts based on the experience of the landlord and the type of transaction.

The lender, an arm of OneSavings Bank plc, has revised its rental cover rates on transactions for the following property types:

A single dwelling or a house in multiple occupancy (HMO) or a student let with fewer than four letting rooms.

A property that was purchased or re-financed via a Limited Company and is a single dwelling or a house in multiple occupancy (HMO) or a student let with fewer than four letting rooms.

A freehold block / title of land with fewer than four residential units.

The rental cover rates for the above transaction types are based on a mortgage interest rate +0.35% or 5% (whichever is higher) and are assessed as follows:

A 110% rental cover, at the applicable stress rate, may be considered for experienced landlords who own three or more buy to let properties, where the blended portfolio rental income exceeds 125% based at a 5% notional interest rate. This is available up to 75% LTV.

Where blended portfolio rental income is not being used, a 125% rental cover will be applied for landlords who own three or more buy to let properties (including the subject property).

Whereas a 130% rental cover will be applied when a landlord owns fewer than three buy to let properties.

Where the loan is for one of the following transaction types, a different rental cover will apply, still based at the mortgage interest rate +0.35% or 5%, whichever is higher:

An HMO or multi/student let with four or more letting rooms

A property that is purchased or re-financed via a Limited Company and the property is a single dwelling or HMO or multi/student let with four or more letting rooms

Freehold blocks/titles of land with four or more residential unit

The rental cover allowed will again depend on the type of transaction.

For example, 140% rental cover, at the applicable stress rate, may be considered for experienced landlords who own three or more buy to let properties, where the blended portfolio rental income exceeds 150% based at a 5% notional interest rate. This is available up to 75% LTV.

However, where the blended portfolio rental income is not being used, a 150% rental cover will be applied for landlords who own three or more buy to let properties (including the subject property).

A 160% rental cover will be applied where the landlord is deemed to be less experienced and owns fewer than three buy to let properties.

The changes, which came into effect on the 8th February, will not affect existing Kent Reliance customers who are looking to switch rates.